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Category Archives: Insurance

In the old days people could use their insurance as a maintenance policy. You paid your premium, and little deductible, and insurance would take care of the loss. But nowadays it’s too expensive for that! You use it once and you will loose your claims free discount and ending up paying back any small claim over the next three years while your policy is rated. If you need it again the premium jumps even more and this necessary expense can get even more burdensome. That is why, as an agent who prides himself on putting the customer first, I want to inform you about your protection, and how investing a little time can give you the protection you need, and make the money you are spending go as far as possible.

To maximize the efficiency of the money you are spending on insurance you should consider using it primarily for a catastrophic loss. By “catastrophic” I mean a major loss that would be “catastrophic” to your finances. That’s not to say $1000 is a small amount of money, but I am betting there are more people reading this who rarely, if ever, need to use their insurance and thus can consider this cost as an acceptable risk. Obviously, the higher the deductible the lower your premium, and the lower this burden will be to you and your family.

First off, there are two parts to auto and home insurance. One, I will call the “structural” coverage which repairs or replaces your asset. The other is the “liability” coverage that protects you from people suing you for monetary damages. Structural coverage is guided by your deductibles. These deductibles are really the amount you are willing to “self-insure” your asset. The structural insurance will repair of replace your asset to its former condition, less your deductible.

For auto insurance, I recommend you use deductibles of $500 for Comprehensive and $1000 for Collision. Comprehensive coverage is for everything except Collision, (generally Fire, Theft and Vandalism), and Collision coverage is understandably the physical impact on your vehicle. Collision comes into play primarily when you are at fault in an accident (otherwise we will have their insurance fix the car), and if you are at fault in an accident you should be more concerned with your Liability exposure, than how much you have to come out of pocket to fix the car.

One note here: If you get hit and the other car takes off, make sure you get a license number so we can either go after their insurance, or cover your repairs with Uninsured Motorist coverage which we should have. If we can’t ID them we can’t prove they are Uninsured and thus you will have to pay your deductible. Uninsured Motorists represent @26% of the cars on the road in California but are involved in @42% of the accidents, so if you are involved in an accident chances are good they may be Uninsured.

For homeowners insurance, I recommend you use a deductible of at least $1000, if not more. Using your homeowners insurance for any claim of around $1000 or less is not an efficient use of that insurance. That’s because your policy is “rated up” for three years if you use it. This means the premium is increased and the money you thought you saved in using you insurance will cost you the same or more over the next three years. I maximize my deductible to $5000, understanding that while it would be painful, chances are it will not be used. I have heard numbers that, outside of the hurricane threatened states, something like 1-2% of the houses across America have a “catastrophic loss. Thus, I am comfortable in the odds that I, like most Americans will never have to use it.

In addition, make sure you understand the replacement values your insurance company will use for your personal property. Most insurance companies say they will use “replacement value” but what they mean is that they will replace your 7 year old couch, with the depreciated value of a 7 year old couch. The industry average for this depreciated basis is 11% per year. Look for an insurance company that will replace you personal property on a new for old basis, of like kind and quality, but brand new!

Earthquake Insurance here in California is a tricky question. If you have it when the big one hits you are brilliant, but if it doesn’t, you are paying a lot of money, for disappointing coverage, for a long time, for peace of mind. If you can afford it then by all means buy it!

Now lets turn to the “Liability” area of your policy. More often than not, I come across policies that have less than adequate “Liability” coverage. It’s a fact of our litigious society that, should you be at fault in an accident that injures someone, you could face the loss of much more than the cost of your deductible. Since you face more of your liability exposure in your car, lets look at obtaining sufficient protection from that potential calamity.

For example, lets say you are involved in an auto accident in which you are at fault. Today, 90+% of the time the other party will talk to an attorney, just as you might should someone injure you in an accident. That attorney will perform “discovery” on you, where you are required to disclose to them your assets (so they can discover how valuable your are to them), and income (here in California they have set precedents in court whereby 30-50% of your income can be attached up to the next 10 years). Mainly these attorneys are looking at three things; 1) The equity you have in any real property, 2) the amount of your savings and investments, and 3) your average yearly income (we believe four times your annual income is sufficient to protect what may be your greatest asset), When you add those numbers up, and especially considering the rapidly appreciating Real Estate market, many people are surprised to find out they have “assets at risk” of close to $1,000,0000. Yet most people still have much less insurance than that.

If you find yourself facing a lawsuit of a large amount and your policy covers you for much less, you will probably get a letter from your insurance company reminding you that you only have coverage up to the policy amount, and that for any judgments higher than that you may want to hire your own legal counsel, at your expense, to settle the matter. That is the last time in the world that you want to discover that you are underinsured, and your insurance carrier is not going to be there for you. They are going to represent you for free, up to the limit of their exposure, but if your agent hasn’t already, you should take it upon yourself to calculate that exposure and make sure you have the insurance company’s money on the table, and the protection you are spending your hard earned money for. Often, I have found that higher liability coverage’s can be obtained at little, if any extra expense just by maximizing your deductibles.

Homeowners liability exposure is generally limited to “slip and fall” cases. In the case of your home, you obviously would never knowingly invite someone over who would consider suing you for this. Recognizing this and its very rare occurrence homeowners liability coverage is very inexpensive and should be sized according to the “assets at risk”. For Landlord policies the exposure is greater and more important that it be addressed in the same fashion.

Be sure about your requirements- Not all policies are the same. For example, under Life Insurance comes Retirement Plans, Child Plans, Term Insurance, Endowment Plans and ULIP. So it is important you choose a plan that will match your requirements. If you are looking for pure protection plans, then a Term Plan is for you.

But if your goal is to have a combination of savings with protection then your options are Child Plans, Retirement Plans or ULIP’s. Over here your goal would decide what kind of cover you should go for. For instance, if your goal is to save for Child’s future then Child Plan would be ideal but if you want to save for your retirement then Pension Plans is the best bet.

Calculate the Cover you need- A lot of factors come into play while deciding the cover you need. For example in Health Insurance, your age, medical history, city of residence, lifestyle habits, etc. is considered while deciding the amount of cover. On the other hand, in Life Insurance factors such as your income, liabilities, number of dependent family members, etc. help to decide the coverage amount. So a 30-year-old person who has a home loan and 2 school going kids should take a higher cover, while a 45-year-old person who has no liabilities and whose kids have started working can opt for a lower cover.

Compare Plans- Comparing plans doesn’t mean just comparing the price. Cheapest is not always the best. You should compare the features, benefits, exclusions and select the plan that suits your needs. For example, while selecting a Health plan for your parents, you should go for a plan that has minimum waiting period, as old aged parents could anytime require hospitalization. Besides, comparing Motor insurance every time, during renewal can be very beneficial plans you can get a discounted premium and may even get additional add-on riders.

Read, Understand & Familiarize yourself with the terms and conditions of the policy- After you have zeroed in the policy that you need read, understand and familiarize yourself with all the terms and conditions. This is important to avoid any surprises and heartaches later. For example in a Health Insurance, you should know what is the Room Rent Limit, Waiting period, Exclusions, Day care procedures, Network hospitals, etc. Similarly, in a Life Insurance Policy, you should be aware of Maturity benefit, Death Benefit, permanent exclusions etc. For example, death or hospitalization due to taking part in adventure sports or war is not covered by many Health and Life insurance policies.

When filing an insurance claim you will file it with a local agent that works for the company and they have the responsibility to instigate the specific details of the claim. Then the agent negotiates the payment from the main insurance company. Many times a recognized authority such as a repair shop, building contractor, or medical professional can file the necessary forms with the insurance company directly. If another party has agreed to pay for their mistake out-of-pocket or the damage is minor, the policyholder may not want to file an insurance claim.

Once an insurance claim is filed the insurance company usually has an appraiser or adjustor without bias evaluate the damage and determine if the estimates for repair the policy holder got are realistic. This can help prevent fraud by companies who inflate their estimates so they can get additional compensation. Most insurance companies will accept the appraiser or adjustor’s valuation as the last word. There are some insurance claims may not be paid for many reasons. Some of these reasons can include:

• The claimant’s premiums have not been paid each month and they are behind
• Policy may be inactive
• Another insurance company may have agreed to pay for the damages that were listed in the insurance claim. This happens often in car accidents where one of the parties is held responsible for the accident.
• Failure to not be under the conditions that are covered because most insurance policies specify specific areas that qualify for benefits
• If the damage or accident claim was an unavoidable “Act of God” or caused by carelessness your insurance company has the right to withhold payment.

The building is insured for a sum and the owner of the property pays a premium for the insurance. If the building is damaged due to the aforementioned calamities, the insurance company pays the insured amount. In building insurance other assets like permanent fixtures and fittings, wardrobe, interior decorations etc are included. Others like garages, fencing, gates, swimming pools may not be covered, but you can check the policy. A building is an asset and is to be protected always. Insuring your building would help you in minimizing your risk and stay in peace. The premium paid for insuring the building is very low and in case of any uncertainty the money would be paid. First the insurance company does valuation of the building and then the property is insured. In case of any uncertainty the insurance company will have to pay for the amount insured.

So if you have a house, go and get it insured as it will be very beneficial in the long run as you cannot predict earthquakes and other natural calamities.

EMOTIONAL DISTRESS: Emotional distress is legitimate “Pain and Suffering” and you should be compensated for it. For example, problems that may develop over the effects of an accident within the area of your work or business, or perhaps interfere with your sex life! Whatever it is that’s causing you problems you should see a specialist. Keep going back to see him for as long as it takes to return to normal. At the end of his treatment, when he’s finally discharged you, ask for and obtain his written report. Present that to Adjuster Henry Hard-Nose along with the specialist’s bill for their services.

This is a legitimate expense and it positively gives your personal injury more value !

SECURING COMPENSATION FOR LIFE DISRUPTIONS: If your injuries caused you to miss some special training you had arranged to take advantage of, you’ll probably, at some point, want to make that time up. The difficulty you may experience in making up that missed time (or perhaps never again being able to obtain it) has the potential to increase the value of your settlement. To achieve this you must obtain written proof and present it to Adjuster Hard-Nose.

Also to be taken into consideration is a vacation you may have been unable to take, or some recreational event’s in which you could not participate in and/or a missed special event, like a wedding or a reunion, etc. All of these, properly documented, add value to your claim because they are specific examples of the inconvenience and discomfort you’ve endured as a direct result of your injury.

YOUR AGE: In the evaluation of an individuals “Pain and Suffering”, age is always a factor because the older you are the longer the periods of Total or Partial Disability will be. This will affect the course of treatment plus the length of time of the “pain killers” you’ve been ordered to take. For example: Over age 50 disability is about 10% to 15% longer, over age 60 disability is about 20% to 30% longer, over 70 disability can be 35% to 45% longer and over 75 disability can often be 50% and longer.

PRE-EXISTING MEDICAL PROBLEMS: Also pre-existing conditions are factor’s that must be considered: For example: Arthritis, Sugar Diabetes, Pervious Injuries and/or Previous Operations that have left you with on-going problems, etc.

Once it is time for an insurance plan to get renewed, the majority of folks are likely to settle for the new rates that they’re given without asking any questions. Even if the new rate could be the best rate that they may find, a lot of people do not take some time from their schedules to look for a better rate. Sadly, this is not always the most suitable practice for people that actually want to save money on their family’s budget. In truth, it is within this period that individuals have a chance to reduce their monthly expenses quite significantly. To illustrate, once the new policy renewal comes in, among the first things that every individual requires to do is begin looking around for multiple quotes. A lot of people highly recommend securing a minimum of three insurance quotes from multiple providers to compare. Before you start this process, however, it is very important for everyone to remember that these insurance quotes can only be compared accurately when the features of the insurance plan are the same. Meaning if the individual is aiming to secure a quotation for an auto insurance policy, they have to request the exact deductible amounts from each company in order that computations will be identical. If that recommendation is not followed, the best rate could be based of lesser coverage.

Go for a Lower Insurance deductible When Inquiring about Insurance Quotations

In addition to comparing quotations from multiple organizations, another wise way of managing monthly insurance payments is to choose lower deductibles. Lower deductibles will automatically lower the value that individuals are required to pay each and every month. However, before these amounts are changed significantly, it is necessary for the covered person to know that this amount comes out of the pocket first whenever a claim has to be filed. So, it is very important for individuals to take into consideration their insurance deductibles very carefully prior to signing the documents.

The insurance coverage rates for policy holders can vary greatly from one to another. This is because the amounts for each person can differ dependent on several types of discounts. One of these may involve buying multiple type of insurance policy from the same company. Because insurance companies are attempting to get as much business from the customers as they possibly can, such a discount may be a win win for both the client and the insurance provider. Another common discount that some people may or may not be familiar with is discounts for those who take defensive driving courses in case of automotive insurance. The reason being these programs teach their students how to make good driving decisions, as well as avoiding accidents. Each discount can help to lower the payments a bit or a lot so it’s essential for individuals ask about every type of discount offered, especially if they need to get the maximum benefits.

All insurance contracts will cover a chance event that may or may not occur. This is the risk you are insuring against. The event may be a fire in your home, a car accident, medical costs or virtually any other event. The sole exception to this is life insurance, which covers your death. This is an event that is bound to occur, however, it is the timing of death that is uncertain here.

There must be some quantifiable economic loss. Insurers will take on risks, but they must be able to quantify and predict the loss involved. The insurance company must be able to know roughly what kind of loss will be involved should the event occur. The loss must be quantifiable in monetary terms. For example, you may be able to insure yourself for medical expenses or a new car, but not for the sadness you experience as a result of an accident.

The loss must be definite. Again, insurers must know what kind of financial risks they are taking one; otherwise they will not be able to set the price of the premium.

The loss must be significant. The financial cost of the insured risk must justify the administrative costs of the insurance contract. Suppose you want to insure a racehorse. Someone will come from the insurance company, assess the value of the horse, write up a contract stating what’s covered and what conditions you must meet, calculate the premium and issue the contract. This will be worth all the effort for a valuable racehorse. However if you wanted to insure your goldfish, it would be difficult to justify the effort involved in setting up the contract.

The loss must not be catastrophic. What is catastrophic will depend on the size of the insurer and the assets they have available. But the insurance will not be worth anything if the loss is more than the insurer could afford. For example, insuring against an earthquake will often be impossible as the losses, should the event occur, would be impossible for the insurance company to ever pay out.

Simple enough, you file an injury compensation claim with a compensation solicitor, but it is always not so simple. Whether filing a claim against a business, insurance company or individual, you need someone who understands the details and is willing to go the extra mile to gain you the compensation you deserve.

Those responsible will have solicitors on their side, working hard as well, so choosing a representative for you will be the most important decision in the initial stages and can make all the difference in the world for your final outcome.

If your solicitor is only interested in the bottom line, then you’re in for a big surprise. It not just about money; it’s about make those responsible, responsible.

This may sound like an obvious statement, but it is very true. If there were parties or individuals whose negligence has caused you injury, then it is your absolute right to demand and receive full compensation for what you have been put through and an accident compensation claim is the way to do it.

There are plenty of solicitors out there, promising the big bucks, but they don’t understand their client’s troubles, and it is these solicitors who can cost you your maximum compensation. A solicitor who truly cares and wants to ease the suffering for their clients will inevitably fight harder and win bigger payouts with better verdicts.

Many people are weary of filing an accident compensation claim because they don’t want to be though of as a ‘gold digger’ and see many of the solicitor’s as ‘ambulance chasers’, but reality couldn’t be further from the truth.

The truth is that you are injured, your injury has left you many number of life-altering challenges, rehabilitation is costly and takes time, and you wouldn’t be in this situation if it wasn’t for someone else’s stupidity.

The question isn’t ‘why do I deserve compensation for this’, but ‘why don’t you deserve compensation for this?’

You’ve been seriously hurt by someone and you are somehow left alone in the cold to deal with it yourself. Many people find themselves in this situation, and choose to take the path of injustice and not get the compensation they deserve.

Why???

While a large compensation victory won’t take away the pain you have felt, or somehow cure you of your debilitation, but can take away one of the biggest stresses in this time of need…

The last thing an injured person needs to worry about throughout their recovery is money. Financial difficulties add enormous amounts of stress and can seriously undermine the recovery process. However, if known properly, you can place your compensation claim’s financial stress on a personal injury solicitor.

If Fred Fuddle is the town drunk, or if his conduct at the accident scene was provably abnormal than the value of your case should increase. If your injuries are visible and/or demonstrable, it’s likely your settlement will be larger. The conduct of both Fuddle and you before the accident may be significant. If you had been at a bar drinking heavily or raising holy hell out on the highway before the accident, you’ll get less regard from the jury than if you were driving to your house of worship with your family.

So, the circumstances of your behavior before, during, or after the accident increases or decreases the value of your settlement.

(1) THE FACTS: The gathering of the provable factual information is the first step in the evaluation. If you try to evaluate a claim without as complete a file of facts as possible, it’s like going hunting for a lion with a slingshot.

(2) THE EVIDENCE: You must weigh all factual evidence known to you against the actual evidence you can produce to substantiate it. No matter what information you’re aware of, your position will always be stronger if you have the evidence to back you up.

For example: You can talk until the cows come home about the unsightly black-and-blue marks you had on your face, ribs, and hips, the scar on your forehead, or the 75 feet of skid marks Fred Fuddle’s auto left on the highway before he smashed into you, but Adjuster I. M. Smart will never adequately comprehend, (nor want to believe you) unless you provide him with photographs.

Providing Smart with the proof-positive of photographs will cause his Supervisor’s eyes to bulge as he inhales a deep breath of resignation and declares, “Hey, this one’s gonna cost us” .

QUESTION: “How can Dan be so sure about that”? ANSWER: “Because before Dan retired, after spending over 30 years on that firing line, he was an Insurance Adjuster, Supervisor, Manager and Trial Assistant. He’s been there, saw that, plus heard (and felt) that many thousands of times”!

Whenever possible you must help Adjuster I. M. Smart justify the settlement figure he wants to get approved by his immediate superior at Granite Mountian Insurance Corporation.

(3) THE LAW: As proved in over 83% of the accidents in the United States in 2003 the impact you were subjected to is clearly the fault of “Fumbling” Fred Fuddle, so the law is on your side.

Armed with the information found in my third book AUTO ACCIDENT PERSONAL INJURY (How To Evaluate And Settle Your Loss) plus THE BASE FORMULA (The Baldyga Auto Accident Settlement Evaluation Formula) you’ll be able to do that. THE BASE FORMULA will correctly evaluate your “Pain and Suffering”. Because of this, you can settle your own claim without handing a huge percentage to an attorney. A lawyer who has done nothing more than have his secretary send Fuddle a letter of representation and then think it’s perfectly acceptable (after many moths, sometimes years, of hiding/stumbling/fumbling and verbally pitching his well-practiced answer when you asked, “Hey what’s going on with my claim?” with an answer like, “I’m right on top of it, hang in there, old friend and I’ll make it come out right”, and then proceed to take a huge portion of your settlement dollars, for doing little or nothing to earn it.

(4) INJURY TO YOU: The seriousness of your injury has to be considered. (Ole’ Doc Comfort, your attending physician’s Medical Report, should go into detail about that).Your age will have an effect on the time it takes you to recover. The time you lost at work will have a direct bearing on the length of your recovery.

(5) SPECIAL DAMAGES: All of your direct and tangible losses are prime factors to be implemented in the consideration of the value of your claim.(Clearly stated details regarding Damages are found in Chapter Four of my book).

(6) INTANGIBLE ELEMENTS: These include your reasonableness, your economic status, your standing in the community, the obvious sentiment conjured up when one considers the degree of the seriousness of your injury, plus the attitude of Fred Fuddle (and often your witness) regarding your case.

Most people would identify 5 main areas of concern, all of which boil down to your ability to maintain the mortgage repayments:

Interest rates might increase and make the monthly repayments unaffordable

You might lose your job

You might be forced to take time off work through illness or accident

You may become permanently unable to work through accident or very serious illness

You could die before the mortgage is paid off

The financial industry is packed with pretty shrewd people so it’ll come as no surprise to learn that there are financial products to help with each of these risks.

If you want to reduce the risk of interest rates rising to unaffordable levels, you should have discussed these matters with your mortgage adviser. He will then have told you about “fixed” and “capped interest rate” mortgages. As the name implies, a fixed rate mortgage fixes the interest rate you pay whilst with a “capped” mortgage, the lender agrees not to increase your interest rate above a pre-agreed level. Both types of mortgage revert to the standard variable rate after the fixed or capped period finishes which is typically after three or five years, depending on your lender.

Fixed rate mortgages are currently very popular accounting for 55% of new advances and there are some very good deals around. The capped rate for capped rate mortgages is usually set at the outset above the equivalent fixed rates available but the rate you pay is lower than the fixed rates. In this context your interest rate risk can be effectively controlled. After the end of the protected period you always have the option to re-mortgage and find another rate protected deal. There are never any guarantees on the rates that will be available but the mortgage market is highly competitive, especially for re-mortgages, and special rate offers abound. It’s really a matter of knowing which lender to approach. When the time comes you’d be well advised to ask a mortgage broker to search out the most suitable options.

Worried about paying your mortgage if you lost your job? Then you need Mortgage Payment Protection Insurance – but be aware that in its basic form, this insurance is really only designed to cover redundancy. If you resign or are fired for gross misconduct your unlikely to be insured. The cost? Online you can expect to pay around £2.45 per £100 of monthly mortgage payment for a policy which starts paying out 30 days after you’ve been made redundant and will pay out for up to 12 months. You’re sure to have been offered similar insurance by your bank or mortgage company but watch out, their premiums are likely to be two or three times higher for identical cover.

Mortgage Payment Protection Policies can also be extended to cover the third area of concern – you lose income through illness or accident. But before you rush into this insurance you need to ask your employer how long they’d continue paying you if you were off work. Remember, you only need to insure for the period after your employer stops paying. You would then receive statutory sickness pay, but the odds are you’ll need that income for general living costs. The cost for this insurance? Well, online it’ll again cost you around £2.45 per £100 of monthly mortgage payment for a policy which starts paying out after 30 days, However, if you combine illness, accident and unemployment cover all into one policy you can currently get combined insurance for around £3.95 per month. The essential point to remember is that these policies will only pay out for 12 months. That leads on to the fourth area of concern.